Steve Hartsoe, AP, San Francisco Chronicle, SFGate.com, September 2, 2004
Former Rep. Frank Ballance, who cited ill health in resigning from Congress in June, was indicted on federal fraud and money-laundering charges Thursday in connection with a drug and alcohol counseling program he founded.
The 62-year-old Democrat was indicted along with his son, Garey Ballance, who was charged with not filing a tax return in 2000.
Ballance resigned from Congress four months after being diagnosed with myasthenia gravis, a condition that results in muscle weakness. At the time, federal and state investigators were looking into the foundation.
A stinging state audit last fall found that the John A. Hyman Foundation was riddled with conflicts of interest and had made $325,000 in questionable payments. The foundation has received $2.1 million in state money since 1994, thanks in part to Ballance, a former state legislator.
The indictment claims Ballance used his office as a state senator to obtain more than $2 million for the foundation, and used more than $100,000 to benefit himself, his family, and a church where he served as chairman of the board of deacons.
The indictment also alleges he forged or caused the forgery of the notarized signature of a foundation official, and accuses him of concealing the proceeds of the fraudulent schemes.
Neither Frank Ballance, who was elected to Congress in 2002, nor his 34-year-old son could immediately be reached for comment Thursday.
Joseph Cheshire V, a lawyer for Frank Ballance, said the former lawmaker would surrender and appear in court Friday, and that he expects to reach a plea agreement. “I don’t anticipate a trial,” Cheshire said.
Boyd Sturges, an attorney representing Garey Ballance, declined to comment.
Ballance was indicted on charges of conspiracy to commit mail fraud, mail fraud of money and money laundering — a charge that carries a maximum sentence of five years in prison and a $250,000 fine. His son faces a maximum of one year and a $100,000 fine if convicted.
Garey Ballance is accused of using $20,000 in foundation money to buy a new Lincoln Navigator, and not reporting it as required on his income tax return.